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Sikkim’s tryst with pharma sector

Sikkim, known for its picturesque valleys and lush green hills, is a renowned tourist destination. But, if you think that this is its only claim to fame, think again. The small Himalayan state is also home to more than 40 pharma companies. Till 2014-15, the state was able to attract investments worth of $414.73 million and the figures continue to grow.

According to India Brand Equity Foundation (IBEF), between 2011-12 and 2016-17, Gross State Domestic Product (GSDP) expanded at a compound annual growth rate (CAGR) of 11.05 per cent to $ 2.93 billion whereas the Net State Domestic Product (NSDP) expanded at a CAGR of 11.30 per cent to $ 2.58 billion. The Gross State Domestic Product (GSDP) of Sikkim expanded at a high CAGR of 12.18 per cent between 2011-12 and 2017-18. The state has attracted Foreign Direct Investment (FDI) equity inflows worth  $4.78 billion during the period April 2000 to June 2018, according to data released by Department of Industrial Policy and Promotion (DIPP).

The state is not so far behind Gujarat, Maharashtra and Baddi in Himachal Pradesh in becoming a hub for the pharma industry.

Creating a conducive business environment

Hilly terrains with unpredictable weather notwithstanding, Sikkim has been able to attract the attention of pharma companies. According to Edelweiss Securities, the overall revenue for the pharma sector is likely to grow 17 per cent YoY (year-on-year) and PAT 50 per cent YoY. Conducive government policies in Sikkim which offers 100 per cent excise and income tax benefits in addition to freight subsidy is one major reason for this rise.

Deepak Verma, GM, Zuventus Healthcare, informs, “Sikkim contributes approx Inr 10000-15000 crore annually, mostly to the domestic market, that means an average contribution of 10 per cent.”

With government strategies focussing more to create a conducive environment for pharma companies to set up their base in the state, P Ramesh, Plant Head, Micro Labs informs that the strategies has been appreciated a lot. He says, “Sikkim has responded extra-ordinarily and performed better than expected. All big pharma giants have ensured their presence in the state and are prospering at a much higher pace than expected.”

Economic benefits

Apart from tourism, which adds to the bulk of the revenue, the pharma sector has also been able to add revenues to the state exchequer. Easy availability of labour, lower power and manufacturing costs, amongst others are also reasons why the pharma sector is attracted to the state.

Says Dutta from Sikkim Manipal Institute of Medical Sciences, “Sikkim’s growing economy has improved the living standards and generated employment. The rapidly growing pharma industry has facilitated bolstering downstream SMEs and ancillary units and upgrade skill development.”

According to Verma from Zuventus Healthcare, Sikkim has a huge scope for biomass research as the state is abundant in medicinal plants. He says that the rich cultural background, good administration, overall conducive business environment, etc. will help the state to go to new heights.

 

Strategies for further success

The future looks bright for the state provided it manages to chart out plans with more industry friendly policies, better infrastructure and transport facilities so that pharma companies feel more comfortable conducting business. Fortunaltely, the companies have recognised this.

According to Ramesh from Micro Labs, the pharma industry operating in Sikkim is able to maintain their high standard of manufacturing practices while ensuring availability of quality medicines for all in  the country. However, the industry should look for developing and implementing innovative strategies and best in-class practices. More number of injectables and ointment plants could also be explored.”

He also mentions that by placing solar panels, solar energy can be converted to green energy, which will lead to save power and ultimately prevent generation of carbon.

Verma from Zuventus Healthcare says, “Pharma plants need to adapt GMP, GDP, proper process validation processes, data reliability methods and risk mitigation principles. These are important points that need to be addressed and this is possible only, when proper training is parted to the local people who are employed in the pharmaceutical plants in Sikkim.”

Dutta from Sikkim Manipal Institute of Medical Sciences is of the opinion that strong quality management system, with focus on elements such as data reliability, good documentation practices and process validation are imperative in achieving operational excellence which will help pharma companies do business in Sikkim in an easier manner.

“Technical upgradation through instrumentation R&D mechanisms, achieving optimal automation capabilities, upscaling personnel skills through internal and external training programmes can all lead to value added quality enhancement. Adopting benchmark industrial waste management systems should also be a top priority for all facilities, to ensure that the fragile ecological balance of this beautiful state remains undisturbed,” he says.

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